USDJPY Technical Analysis / Forex Technical Analysis

USDJPY Technical Analysis – 5-August-2024

FxNews—The American dollar has been losing value against the Japanese Yen since the July 3 high of 161.9. The downtrend is robust, and the USD/JPY broke below the March 8 low at 146.4 in today’s trading session, heading toward the December 28, 2023 low at 140.2.

This intense selling pressure has driven the stochastic oscillator and RSI (14) into oversold territory in the daily chart. The diagram below demonstrates the price, key support, and resistance levels in the daily time frame.

USDJPY Fundamental Analysis – 5-August-2024

USDJPY Technical Analysis – 5-August-2024

We zoom into the 4-hour chart to examine the price action and key technical indicators more closely. As depicted in the USD/JPY 4-hour chart below, the primary trend is bearish, as the price is below the 50- and 100-period simple moving averages.

Other technical indicators suggest the primary trend is bearish, but the Japanese Yen might be overpriced against the U.S. Dollar in the short term. Hence, the dollar can erase some of its recent losses.

USDJPY Technical Analysis – 5-August-2024

The awesome oscillator is below the signal line, depicting -6.72 in the description, meaning the downtrend prevails.
The relative strength index indicator, with a value of 16, is oversold, indicating an oversold USD/JPY market.
The stochastic oscillator value is 8, and the %K line is in the oversold area, pointing to an oversold market and supporting the RSI signal.

USDJPY Forecast – 5-August-2024

The primary trend is bearish; the next key resistance level is December 28, 2023, at 140.2. It is apparent that the bears are heading toward the 140.2 supply area, but we expect the market to consolidate near the March 8 low at 146.4 before the downtrend resumes. This speculation arose because RSI and Stochastic indicators have been floating in the oversold area in the daily chart.

Hence, traders and investors should closely monitor the 146.4 resistance for sell signals such as bearish engulfing patterns, shooting starts, or inverted hammers. Spotting one of these patterns could be a firm confirmation of joining the bear market.

Also read: NZDUSD Technical Analysis – 5-August-2024

USDJPY Bullish Scenario – 5-August-2024

The key resistance level is the 50-period simple moving average, which coincides with the July 25 low at 151.9. The bulls (buyers) should close and stabilize the price above 151.9 to shift the trend from bearish to bullish, which is unlikely anytime soon.

However, the immediate resistance is at 146.4 on March 8. If the price crosses above 146.4, the consolidation phase will likely extend to the August 1st low at 148.5.

Furthermore, if the USD/JPY price surpasses 148.5, the next demand zone for the bears will be the 50-period SMA-backed resistance at 151.9.

USDJPY Support and Resistance Levels – 5-August-2024

Traders and investors should closely monitor the key levels below to make informed decisions and adjust their strategies accordingly as market conditions shift.

Support: 140.2
Resistance: 146.4 / 148.5 / 151.9

Disclaimer: This technical analysis is for informational purposes only. Past performance is not necessarily indicative of future results. Foreign exchange trading carries significant risks and may not be suitable for all investors. Always conduct your research before making any investment decisions.